Contrary to what many assume, membership in the group isn't restricted to the poor
It's true that the vast majority of the 69 million households make less than $50,000 -- with very heavy representation among households making less than $30,000.
But nearly 5 million households in the group make somewhere between $50,000 and more than $1 million. The vast majority of that group -- 4.3 million -- make between $50,000 and $100,000
. Another 485,000 make between $100,000 and $500,000. And the remaining 18,000 make $500,000 or more
Very high-income households can fall into the non-payer group if they get their income from tax-exempt bonds or overseas sources for which they get foreign tax credits, according to Roberton Williams, a senior fellow at the Tax Policy Center.
Other data from the IRS show that the tax bite on the very highest income taxpayers has fallen as their incomes have risen
. In 2007, the top 400 individual tax returns had an average adjusted gross income of $345 million, up from $47 million in 1992. But their average tax rate was just 17%, down from 26% in 1992.
How did we get here?
The ranks of those whose federal income tax burden nets out to zero -- or less -- have grown in recent years for two reasons.
The first is temporal.
The downturn in the economy has hurt household incomes and various stimulus bills offered Americans temporary tax breaks to mitigate the economic pain -- thereby further reducing their tax bills.
The second is more systemic.
The tax code is filled with hundreds of tax breaks to encourage economic activities the government favors, tax experts say. For instance, the law offers credits to supplement the wages of low-income workers, help families pay for college and encourage them to buy homes and have children.
Temporary tax policies, such as the Bush-era tax cuts and the tax breaks passed under President Obama, have also increased the ranks of the non-payers.
If most tax breaks were removed, the Tax Policy Center estimates, the percentage of households with no federal income tax liability would drop to 27% from 45%.